TORONTO/RIYADH, April 15 (Reuters) - Saudi Arabia's
state-owned agricultural investment firm and U.S. grain trader
Bunge Ltd will buy a controlling stake in Canadian grain
handler CWB, in a bold move by the Gulf state to secure food
supplies.

G3 Global Grain Group, a joint venture of Bunge and Saudi
Agricultural and Livestock Investment Co (SALIC), said on
Wednesday it will buy a 50.1 percent stake in CWB for C$250
million ($201 million).

The remaining stake will be held in trust for Canadian
farmers with G3 having an option to buy them out after seven
years. Farmers owned an equity stake in CWB, formerly known as
the Canadian Wheat Board, until the government stripped it of
its Western Canadian grain monopoly in 2012.

Saudi Arabia began scaling back its domestic wheat-growing
program in 2008, planning to rely completely on imports by 2016
to save water. SALIC was formed in 2011 by late King Abdullah to
secure food supplies for the kingdom, mainly through mass
production projects and foreign investment.

"Canada is a major wheat grower and exporter, and Saudi
Arabia relies on imports to meet its growing demand for food,"
SALIC Chairman Abdullah Al-Rubaian said in a statement, adding
G3 would "strengthen grain off-take and export capabilities in
Canada".

In a multibillion-dollar search for food security, Saudi
Arabia and other Gulf desert states, which rely on imports for
80 to 90 percent of their food needs, have invested heavily in
agricultural projects overseas since 2008.

Canada, the world's second-largest wheat exporter, shipped
378,000 tonnes of wheat to Saudi Arabia in 2013/14 and 126,500
tonnes of barley, according to the Canadian Grain Commission. In
contrast, total Saudi imports in that period were 3.43 million
tonnes of wheat and 9 million tonnes of barley, according to the
U.S. Department of Agriculture.
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